- The market sentiment is a mixed bag on the back of inflationary pressures.
- Higher Iron ore prices failed to boost the Australian dollar.
- Investors remain sidelined, awaiting crucial US CPI data due on Wednesday.
- AUD/USD: From a technical perspective, the pair is in a downward trend.
The AUD/USD is beginning the Asian session on the wrong foot, is down 0.04%, trading at 0.7347 during the day at the time of writing.
The market sentiment is mixed, as witnessed with US stock indices closed with losses between 0.24% and 0.35%. Meanwhile, Asian equity future indices seesaw between gains and losses. Factors like the energy crunch and inflationary pressures keep investors uncomfortable to open new positions on the AUD/USD pair.
Iron ore prices are up 11.21%, trading at $129.00 per metric tonne, but the Australian dollar has not followed its footprints.
On the macroeconomic front, the Australian docket will feature the Westpac Consumer Confidence for October, expected at 2.4%, more than the September reading at 2%.
Data-wise, the September CPI data is due on Wednesday in the US, and the market is expecting 5.3% YoY and 4.0% YoY, respectively, on headline and core.
AUD/USD Price Forecast: Technical outlook
Daily chart
The AUD/USD pair trades between the 50 and the 100-day moving averages (DMA’s) that lie at 0.7302 and 0.7416, respectively. The 200-DMA is located above the current spot price, meaning that the pair is in a downtrend.
To resume the downward trend for AUD/USD sellers, they will need a daily close below the October 12 low at 0.7330. in that outcome, sellers could push the price towards the confluence of the 50-DMA and the figure at 0.7300. This level is crucial, as a break underneath could open the door for the September 30 low at 0.7169.
Momentum indicator like the Relative Strength Index (RSI) is at 57, edging lower, indicating that downward pressure is waning, suggesting that the pair might consolidate before resuming the downside bias.
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